I'll never be able to support my assertion but NAFTA probably would have been fine had we not also sold our souls to China a few years later. In a NAFTA only world, some jobs would have moved to Mexico but as Mexico became more affluent equilibrium would be eventually be reached and both nations would grow. Add cheap labor from China into the mix then you an economy with stagnant salaries and stagnant growth.

Free trade deals that don't also include open worker mobility - which the vast majority, like NAFTA, CAFTA and presumably-but-we-aren't-allowed-to-know the TPP, don't - are inherently bad for working people in all countries involved. They simply create arbitrage opportunities for labor costs. It's the same essential principle as why prison labor is so cheap.

The lower productivity means there are fewer goods and services being created per hour worked. Fewer goods and services means higher costs, not lower. Total global growth is reduced if you use lower productivity. This does not help the poor. It makes EVERYONE worse off in the long run, even though capital owners can see short term personal gains from current wage arbitrage.

Cubicle Jockey:FarkedOver: That is probably one of the most ridiculous things you have said in recent memory.Its

Indeed, lower cost employees in the 3rd world are less productive then Americans are.http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_hour _w orked

The lower productivity means there are fewer goods and services being created per hour worked. Fewer goods and services means higher costs, not lower. Total global growth is reduced if you use lower productivity. This does not help the poor. It makes EVERYONE worse off in the long run, even though capital owners can see short term personal gains from current wage arbitrage.

This is simple, basic economics.

On the labor cost side shouldnt it be analysed as productivity per wage input. Fine they may be 25% less productive but they work for 50% less. You employ more people to produce the same but still get less wage input.

Cubicle Jockey:FarkedOver: That is probably one of the most ridiculous things you have said in recent memory.Its

Indeed, lower cost employees in the 3rd world are less productive then Americans are.http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_hour _w orked

The lower productivity means there are fewer goods and services being created per hour worked. Fewer goods and services means higher costs, not lower. Total global growth is reduced if you use lower productivity. This does not help the poor. It makes EVERYONE worse off in the long run, even though capital owners can see short term personal gains from current wage arbitrage.

This is simple, basic economics.

They'd probably be more productive if they weren't working in awful environmental conditions, worked to the bone, paid jack sh*t, and had access to basic healthcare.

But it's cool. We'll just put up some suicide nets and pay off some building inspectors in 4th world countries.

I'll never be able to support my assertion but NAFTA probably would have been fine had we not also sold our souls to China a few years later. In a NAFTA only world, some jobs would have moved to Mexico but as Mexico became more affluent equilibrium would be eventually be reached and both nations would grow. Add cheap labor from China into the mix then you an economy with stagnant salaries and stagnant growth.

I used to think the same thing, but then I met some people from Mexico. Labor was always going to be cheap in Mexico because the government fixed the labor prices. Say you worked at a Chrysler plant, but you want to improve your wage. You check out Ford and GM, and guess what? The wages are exactly the same. There is no labor competition, and the people working in the plants can only progress so far. There was no rising tide. It's still a lot better to come to America for a job or to work for a cartel. Even if China never entered into the mix, wages were frozen and unionizing is against the law.

Cubicle Jockey:The lower productivity means there are fewer goods and services being created per hour worked. Fewer goods and services means higher costs, not lower.

Total goods per hour per worker is not the same as the total number of goods produced or the total number of goods per dollar. If you have more workers you can still make more goods and make them cheaper overall.

jigger:If you have more workers you can still make more goods and make them cheaper overall.

And if you had more of the more productive workers, you could have even more goods. The math doesn't change based on the scale. Paying one guy with a steamshovel to dig your ditch is better than paying ten guys with spoons, much the same way that two steamshovels beats twenty guys with spoons.

And you are confused by what "cheaper" means in this case. You are lowering the unit price, sure, but you are also lowering the overall wealth of the world which people will need in order to buy the unit. Repeat this across all sectors and you have incredibly cheap goods that NO ONE CAN AFFORD.

Greater productivity is always, always, always better. It's what the agricultural revolution proved 10,000 years ago, and what the industrial revolution proved again 200 years ago.

Yes, so you can pay sweatshop workers $.10 a day to make 20 sweaters instead of $.10 a day to make 10 sweaters. Greater productivity is always better for the guy at the top, not so much the guy at the bottom.

You cannot pay everyone less money per hour, have them create fewer goods per hour, and then somehow believe that they will be able to afford to purchase MORE of those fewer goods with the reduced income they have.

Cubicle Jockey:Indeed, lower cost employees in the 3rd world are less productive then Americans are.

Eh, you're misinterpreting what that means.

People in low wage countries are "less productive" because their economies are weighted more heavily towards low-value goods. I would bet that a typical Bangladeshi garment worker is is far more productive (in terms of t-shirt per hour sewn) than her American counterpart, because besides being paid a pittance, she (for they are almost always women) can be subjected to the kinds of exploitation and brutal working conditions that haven't been seen in the west since the 19th century. Because this combination of low wages and long hours lowers the production cost of t-shirts, the "value added" by that garment worker per hour is minuscule. On the other hand, when that t-shirt gets sold in a retail store in America, for perhaps a 1000% mark-up over production cost, the "value added" in that transaction, and hence that "productivity" of the people who sold it is proportionally higher.

You cannot pay everyone less money per hour, have them create fewer goods per hour, and then somehow believe that they will be able to afford to purchase MORE of those fewer goods with the reduced income they have.

If you have more people working to produce the same because of lowered productivity then you have more customers. The added manpower probably would not have been working a higher income job.

You cannot pay everyone less money per hour, have them create fewer goods per hour, and then somehow believe that they will be able to afford to purchase MORE of those fewer goods with the reduced income they have.

You think the 16 year old girl who put your iPad together will ever own one, or has even touched the finished product? The whole point of free trade agreements is so you don't have to pay your workers enough to afford the finished product. It's like economic vampirism.

Magruda:Yes, so you can pay sweatshop workers $.10 a day to make 20 sweaters instead of $.10 a day to make 10 sweaters. Greater productivity is always better for the guy at the top, not so much the guy at the bottom.

You are completely misunderstanding my larger point, but yes, the world overall would be better off in the situation for the former, including the workers, since they would be twice as likely to be able to afford the good they are producing since you doubled the supply.

Saiga410:If you have more people working to produce the same because of lowered productivity then you have more customers.

You have higher demand, but the same supply. The cost will rise. Now extend that througout the entire economy. More workers, fewer goods. People will overall be poorer.

.

Magruda:You think the 16 year old girl who put your iPad together will ever own one, or has even touched the finished product? The whole point of free trade agreements is so you don't have to pay your workers enough to afford the finished product. It's like economic vampirism.

I am pretty sure the that I came into this thread specifically stating that offshoring to less productive places was bad, and capital was unfairly exploiting wage arbitrage.

Cubicle Jockey: Total global growth is reduced if you use lower productivity. This does not help the poor. It makes EVERYONE worse off in the long run, even though capital owners can see short term personal gains from current wage arbitrage.

Cubicle Jockey:Magruda: Yes, so you can pay sweatshop workers $.10 a day to make 20 sweaters instead of $.10 a day to make 10 sweaters. Greater productivity is always better for the guy at the top, not so much the guy at the bottom.

You are completely misunderstanding my larger point, but yes, the world overall would be better off in the situation for the former, including the workers, since they would be twice as likely to be able to afford the good they are producing since you doubled the supply.

I would argue that doubling their likelihood of being able to buy said good does not actually result in an appreciable gain.